With rents on rise, city makes room for 'tiny homes' on land it owns

There are now an estimated 10,000 tiny houses as people look to take on less financial risk. This has become especially popular for millenials who are looking for cheaper options as they deal with an inconsistent job market and student loan debt.

An architect's rendering of a new "micro estate" community in Tempe, Ariz., designed to tackle affordable housing problems with small, well-designed single-family homes.(Photo11: Newtown Community Development Corp.)

TEMPE, Ariz. — This Phoenix suburb is hoping to help solve its growing affordable housing problem with a community of 600-square-feet homes.

That's twice the size of the trendy "tiny homes" that began sweeping the nation a few years ago with its embrace of simple living. But it's also less than a quarter of the average square footage in a new home built in fall 2017, according to the Census Bureau.

Tempe's leaders like to call their models "humble homes" while the developer dubs them "micro-estates." Whatever the name, buyers will be able to purchase a one-bedroom slice of the American dream for $140,000 or less.

Work is expected to begin next spring on the community of 12 small homes on city-owned land near downtown Tempe.

Beyond the homes, a 900 square-feet building will provide laundry and community space. A communal garden also is in the plans.

The price of one of the homes is now estimated at $138,000 although Crummey said the company is looking for ways to trim it to $100,000 or less.

One way to lower the cost would be to place the land into a community land trust that ensures the land price does not change for up to 99 years, he said. People would own their homes, but not the land, much like a condo.

As this area redevelops and becomes more urban, city leaders are exploring ways to maintain affordable housing. The average rent has jumped by $200 per month since 2015 to become the second highest in metro Phoenix.

This college town averages $1,232 in rent, behind only Scottsdale at $1,322 a month, according to Rent Cafe.

A third of Tempe residents pay 30% or more of their paychecks for housing, which experts say is too much, according to a city-commissioned study.

In 2015, the city enlisted the help of Arizona State engineering students like Brophy to explore the idea of a tiny home community. The students contacted tiny home communities around the country to research what works.

From there, the city purchased the land and sought requests for proposals. Groups such as Habitat for Humanity and local developers submitted plans before the city selected Newtown, which is based in Tempe.

Newtown often works with the federal Housing and Urban Development and other agencies to provide homes to people priced out of the market although this project will be a first for the company.